Illustrations, Design, Muse and Homeworks

I had laboured to create this report for my marketing assignment. But I figured that I rather it be on the web than let it sit forgotten on my computer. Furthermore, I can also share my insights about what I had learnt in the research process with others, as some of the information are derived from the web as well.

This report is about a Japanese retail store, MUJI. Please read on.

Executive Summary

Muji is a global retailing brand that hails from Japan with the motto: “lower priced for a reason”.

The Company believes in simplicity, “no frills” and functionality, hence it sells the wide variety of high quality consumer products of astute designs and minimum packaging without superfluous logos. Its natural and simple design, although plain and unadorned, proposes rational lifestyles for today’s world.

Muji’s adopts a “no-brand” strategy; while tacitly implies that their products are superior, and money saved from not advertising is invested to research and development to create even better products.

Muji’s popularity is attributed to word-of-mouth, a simple shopping experience and the increasing popularity of the anti-brand movement. It appears that more people who are sick of frivolous and prescriptive branding are turning for purely aesthetic and egalitarian reasons.

It is ironic that MUJI, which connotes “no-brand”, becomes identifiable as an international brand of its own. Hence it is curious whether this was a “reverse psychology” form of strategic marketing, or it was authentic marketing, or was it simply the riding on the trend of sustainability/ environmental conservation. The purpose of this report is to uncover what makes Muji so successful worldwide despite its counterintuitive strategies.

This report will examine the various marketing aspects of Muji and it is organised as follows:

Part (1), gives a brief introduction of Muji, while Part (2) give a detailed assessment of Muji’s current marketing strategies, followed by recommendations in Part (3). Part (4) concludes.

In 1989, Muji was separated from Seiyu. Ryohin Keikaku Co. Ltd became the manufacturer cum retailer of Muji products. The Company has been developing and providing diverse arrays of consumer-driven daily necessities (Ryohin Keikaku, 2009).

Ryohin Keikaku believes in developing Muji products that are functional, simple, of superior quality, and at reasonable prices – as reflected in their astute product designs and packaging (Ryohin Keikaku, 2009; Barr, 2008). Through stringent selection of the materials, Muji emphasise recycling and reusability of its products in the production process to minimise impact on the environment (Ryohin Keikaku, 2009; Barr, 2008).

True to their creed, Muji makes conscious rejection of marking their products with logos and refrain from acknowledging designers’ name; they avoid fashioning trends for their products so that they are presented as “everyday” and “basic” and thus stay universally relevant to fit customers’ lifestyles (Barr, 2008; Holoway & Hones, 2007).

In 1991, Muji established its first overseas Muji store in London, and within four years, set up Ryohin Keikaku Europe Ltd to manage the European market. Since 2001, Muji has been actively expanding in Asia (Muji (HK) Co Ltd., 2008).

Muji is a success story; it defies the conventions of a brand obsessed society to market its concept in the form of chic-minimalist design (Huang & Kirkman, 2003). The popularity of Muji products, the superiority of the ordinariness in their designs and the concepts of social responsibility incorporated made it a global trend that is sweeping the world (Ryohin Keikaku, 2009).

Part 2) Critique of Muji’s Current Marketing Strategy

a) Key concepts/ Theoretical framework

The principle of branding is to stand out from the crowd and this is often done through exaggerated inherent drama via brand messages with look-at-me-style stunts (Haig, 2006, p.224). Muji could be applying the Blue Ocean Strategy: by constructing a “no-brand” brand that defies conventional marketing, it serves to make the competition irrelevant (Kim & Mauborgne, 2004 cited in Russell-Walling, 2007, p.17; Haig, 2006, p.225). At the time of introduction, Muji stood out when the vogue was to pursue branded and luxurious good (Peng & Chen, 2007, p.8). Its competitors were advertising fervently to customers, while Muji’s subdued approach got attention from cynical consumers among the clutter (Haig, 2006, p.224). The Muji philosophy of simplicity was ahead of its time and gained popularity for their no-frills, high-quality products.

It is observed that Muji practices different strategies in various markets. In terms of International Marketing, Muji is adopting the ‘Product extension, Marketing Adaptation” global marketing strategy (Keegan, 1999 cited in Samli, 2004, p. 21).

In its domestic (Japan) market, Muji applies Cost Leadership; through production efficiency, streamlined processes, and minimum advertising, it is able to offer quality goods at relatively low prices.

In overseas markets, such as the United States (U.S.) and Singapore, Muji adopts a Differentiation Strategy: it is selling its uniquely designed products which are valued and perceived to be superior by customers at premium prices (Porter, 1980 cited in Russell-Walling, 2007, p.86). The Muji aesthetics, design sensibilities, and its belief in environmental sustainability, continue to add value to the distinctiveness of its products (Roll, 2009). Moreover, Muji seem different from the overwhelming amount of branded merchandises with its “no-brand strategy” (Roll, 2009).

Hence, Muji’s position as a ‘no-brand’ brand is strategic and sustainable as it requires tradeoffs; it chose to limit what it can offer purposefully and thus thwart other’s ability to imitate (Porter, 1996). Established competitors have tremendous sunk costs to abandon their superfluous brand image they had cultivated, while new entrants struggle to distinguish themselves either through aggressive branding or copy Muji’s subtle marketing in the mass market.

b) Mission implications:

The corporate mission of Muji is “Lower priced for a reason” – to introduce simple but high quality products at affordable prices (Muji EU, 2009; Rusch, 2001; Ryohin Keikaku, 2009) and this is reflected throughout the company’s beliefs, operation, marketing and business model.

According to Mangum (2007), there are four key components to Muji’s philosophy which are:

Reasonable price;

Simple, moderate, and functional design;

Basic, understated colours;

Essential parts for people to design their lifestyles at their discretion.

Muji’s three product-development principles are also consistent with the corporate mission concept (Mangum, 2007). They comprise of:

Material selection. Muji makes careful selection of the materials they use – industrial materials that are usually ignored by others or those that can be bought at low cost in bulk – to keep costs down and quality high (Ryohin Keikaku, 2009; Mangum, 2007).

Simple, uniform packaging. Muji simplify their packaging to the extent of bare minimum to emphasize the natural qualities of the product, and minimizing both cost and waste (Ryohin Keikaku, 2009; Mangum, 2007).

Efficient production processes. Muji streamlines their manufacturing process through constant inspection of its production at every stage (Ryohin Keikaku, 2009; Mangum, 2007).

c) What is Muji? Muji’s Positioning Strategy:

In line with its mission, Muji defines itself by its pursuit of simplicity and functionality through its bare-bone chic product designs (Coco Master, 2008). Throughout its marketing collaterals, Muji positions itself in terms of three basic ideas: “Simple, Functional and Affordable” (Holloway & Hones, 2007).

Simple – the designs of Muji product are understated, plain and thus able to blend into the environment; Functional – Muji products are versatile, adaptable and useful; and Affordable – they are of good value (Holloway & Hones, 2007). Although Muji constantly positions itself as a mundane and banal, it is a paradox – it is precisely their symbolic production to be part of ordinary life which makes it unique (Holloway & Hones, 2007).

[Please refer to the marketing mix below to see the integration and support for this strategy]

d) Competitor assessment:

In the international market, Muji is often compared to the other famous purveyors of “good designs” at affordable prices include Target, Ikea, and Gap (Hsu, 2007; Hall & Woyke, 2007; Fralic, 2007).

Target uses artful, whimsical and outrageous images to market its brand.They merchandise in a theatrical manner which adds whimsical touches (visual flourishes) to the design of their products (Hsu, 2007)A popular discount retailer which is second after Wal-mart in the US.

Muji revels in the minimalist approach; most of their products appear bland as they are devoid of colours or in beige blanket of neutrality (Hsu, 2007; Hall & Woyke, 2007; Fralic, 2007).Nonetheless, the fine simplicity and utilitarian provenance of Muji’s products are delightful and nondescript, and thus attractive (Hsu, 2007).

In contrast to its competitors who relish in superfluous details and ornamentations, Muji stands out because it contends with being ‘ordinary’ and neutral (Hsu, 2007; Hall & Woyke, 2007; Fralic, 2007).

e) Branding strategy:

The phenomenon of Muji becoming an international brand is “accidental” as it did not set out to build a brand consciously. The management believes that a brand name or logo is extraneous and futile towards benefiting the customers. The money saved from not advertising and brand building was invested into creating better design at affordable prices (Gogoi, 2005).

Although Muji is an anti-brand in terms of marketing, there are nonetheless four factors which made Muji identifiable as a brand: Style, Simplicity, Value and Uniformity (Haig, 2006, p.226).

Style: With its strength in product design, Muji is undoubtedly a stylish brand that stems from its product, rather than trendy marketing. It had won several prestigious accolades which add favourably to the brand image (Haig, 2006, p.226).

Value: Muji is able to keep costs low, while ensuring quality products, because it limits its advertising and streamlines its production processes (Haig, 2006, p.226).

Uniformity: The Company has a consistent brand identity; it adopts a limited product palette of black, white, khaki, beige, and silver that reflects the raw materials’ natural colours (Haig, 2006, p.226). Furthermore, Muji often uses clear cellophane materials to wrap its products and provide consumers with transparency of the content (Avella, 2004, p.99). All packaging are plain but uniform; listing only the product related information and the price with the distinctive red Muji typeface in kanji (Haig, 2006, p.225; Avella, 2004, p.99; Muji, 2009). This is aligned to the company’s beliefs (Muji, 2009).

f) Market segments:

Traits of Muji Market intended audience:

– Demographic: Consumers are in their 20s and 30s (Hall & Woyke, 2007).

– Psychographic: In general, Muji has three broad categories of customers based on their lifestyles.

Since its inception, Muji strikes a chord with marketing-weary yet design-savvy customers who hate supporting corporate logos (Wylie, 2005; Gogoi, 2005). Muji seeks to attract people who are satisfied with the bare necessity rather than those who pursue brands for the sake of vanity and desires (Wylie, 2005; Peng & Chen, 2007, p.126; Gogoi, 2005).

The other segment consists of people who support Muji’s environmental friendly stance (Grant, 2007).

The third group is consumers who are thrifty and looking for frill-less products.

g) Targeting strategy:

In today’s Experiential Economy, Muji is successful at targeting its first and second segment of customers, the brand cynics and the environmental advocates, because they are demanding authenticity. Authenticity is about being real and genuine and it has five criteria: Natural, Original, Exceptional, Referential and Influential Authenticity (Gilmore & Pine II, 2007, p.49-50).

Muji’s products are made from (natural) materials; possess (originality) in their designs; (exceptional) pursuit of its brand values for excellence; make (referential) to the Zen minimalist; and exerts (influential) authority to pursue environmental sustainability.

“Stealth luxury” is a form of understatement which only ‘connoisseurs’ appreciate, and it is an emerging new trend (Tungate, 2008 cited in Sims, 2008). Muji’s “no-brand” scores because customers pride themselves as being sophisticated to recognise quality choice which is encoded in the item in the guise of a style, instead of relying on logos (Tungate, 2008 cited in Sims, 2008).

In Japan, Muji is staggering cheap as it achieves cost leadership through production efficiency and saves on frivolous brand building efforts (Gogoi, 2005). This allows them to be popular among the price sensitive customers – their third target segment.

h) Distinctive competencies:

Muji is distinguished by their emphasis on recycling, avoidance of waste in production and packaging, and conservation of natural resources.

Muji’s products are sleek and thus a conversation piece (Gogoi, 2005; Peng & Chen, 2007, p.126). It is common for people to guess whether an unbranded good with excellent design is from Muji, especially in Japan (Gogoi, 2005; Peng & Chen, 2007, p.126). Based on Kotler’s classical marketing theory, Muji has garnered strong customer loyalty as people can remember the traits of Muji at first sight (Peng & Chen, 2007, p.126). Thus, Muji has become an epitome of secret brands (Gogoi, 2005).

The Muji aesthetics resembles Wabi-Sabi – the Japanese worldview of beauty which is based on the acceptance of transience. Wabi-sabi suggests asperity, simplicity, modesty, and being natural, which is similar to Muji’s design philosophy to strip down everyday products to their basic elements and achieve an understated elegance (Wylie, 2005; Peng & Chen, 2007, p.97).

In contrast to the secular need to boast personalities through flamboyance; the unadorned and plain Muji products have a rich sense of quality which exudes a sense of intimacy that is accommodated by consumers worldwide (Peng & Chen, 2007, p.97).

Due to the allusion to wabi-sabi and the influence of Zen, there is implied depth and “spirituality” in the Muji brand which is rare in business. There is cultural dimension (Holloway & Hones, 2007) and emotional branding; a potent mix which draws customers enamoured with the Japanese culture, ingenuity and design sensibilities.

i) Marketing mix:

i. Product advantages:

Muji first started with a handful of products that consisted mostly of food and sundries (Hsu, 2007; (Peng & Chen, 2007, p.97).

Since then, Muji’s offering expanded to over 7,000 items that encompass most aspects of daily life. It ranges from household products, kitchenware, stationary, electrical items, compact cars (Muji March, a joint development with Nissan), prefab houses (Muji-Infill) and so on (Hsu, 2007; Peng & Chen, 2007, p.97). This is part of Muji’s marketing strategy – to become a complete lifestyle concept provider based on their corporate philosophy[1] (Peng & Chen, 2007, p.21, p97).

On the surface, Muji’s fervent concentration on quality may be seen as embracing the product concept: whereby the business focuses on continuous improvement and refining on its product performance (Kolter, Adam, Brown & Armstrong, 2006, p.19).

Delving deeper, Muji excels because it practices market orientation: the coordination of the whole organisation to determine and satisfy what people need in their life and delivering it better than competitors (Kolter et al., 2006, p.20; The New Penguin Business Dictionary, 2003; Ryohin Keikaku, 2009).

This is because Muji involves its customer in its new product development process; their Japanese website, Muji-Net, becomes a platform for design and production which allow customers to participate (Haig, 2006, p.225 – 226). This strategy, also known as the collective customer commitment, allows Muji to factor their customers’ needs and has led to impressive sales results (Ogawa & Piller, 2006).

Muji’s “no-brand” strategy indicates their confidence in their product and implicitly trusts the consumers to take notice. When the consumers do notice and recognise the thoughtfulness – the hallmark of great design, they revel in the shared belief that the choice to opt for something beautiful matters (Newlin, 2009, p.74). Often times, Muji products are so unique that they incite the oomph’s from consumers. This is one of the reasons why Muji succeeds – Emotional branding.

ii. Place/ Distribution Channels

In Japan currently, there are more than 342 Muji stores, some of which are distributed through general licensed stores and Seiyu (Ryohin Keikaku, 2009). JR East Retail Net Co Ltd, an intermediary, operates the Family Mart stores and Muji com-Kiosk, Muji-to-GO on behalf of Ryohin Keikaku (Ryohin Keikaku, 2009).

Aside from retail stores, Muji opened online stores since August 2000, for the UK, US, Europe and Japan markets (Ryohin Keikaku, 2009).

The wide distribution channels, through numerous retail outlets and the online platforms, make it accessible and convenient for customers to encounter the Muji experience.

iii. Price

Muji prides itself for providing high quality products cheaply, as encapsulated by their corporate mission: “Lower Priced For Reason” (Japan Industrial Design Promotion Organisation, 2007, p.100; Ryohin Keikaku, 2009). This can be attributed to a cost leadership strategy. In Japan, Muji is very popular as its prices are competitive with other discount retailers (GMID, 2009).

In overseas markets, such as the U.S. and Singapore, Muji is selling at premium. Muji’s overseas branches import from Japan; the cost of freight, custom duty, inspection fee, handling fee and etc, adds up to 150 to 160% difference between the retail prices at Muji SOHO and Muji Japan(Tanaka, 2008 cited in Price, 2008).

This, however, does not augur well with Muji’s customers in overseas markets. The initial euphoria over the opening of Muji in the U.S. was replaced with disappointment. Several consumers were ranting on blogs over the exorbitant prices at Muji SOHO for plain looking commodities, which is contrary to Muji’s stance (Price, 2008). Muji’s popularity plummets (Price, 2008).

Muji SOHO is unable to compete on prices because the import costs are high. The mixed signals from the huge disparity of prices in different countries may undermine the core brand.

iv. Promotion

– Advertising Campaigns

Under the direction of Ikko Tanaka in the 1980s, Muji’s exudes a simple and clear image which is proud of its unspoken sensitivity (Peng & Chen, 2007, p.174). It is based on a value system that one can enrich life with minimum extravaganzas (Peng & Chen, 2007, p.174).

Kenya Hara, Muji’s second art director, expanded on Tanaka’s original idea, replacing the concept of “simplicity” with “emptiness” (Peng & Chen, 2007, p.174). The series of advertising campaigns from 2003 to 2007 “whisper” its message; it respect and allow their audience to make their own interpretation of Muji in a form of interactive communication (Peng & Chen, 2007, p.174; Haig, 2006, p. 225).

– Publicity

Publicity makes up for Muji’s lack of branding to reach out to its customers. Through its outstanding product designs, Muji wins accolades, gains press attention and gets featured in several design annuals and books (D&AD, 2005; Japan Industrial Design Promotion Organisation, 2007, p.100). One notable example is the international media coverage of the uniquely fan-like Fukazawa’s CD player (D&AD, 2005).

Furthermore, Muji had often been cited and commended by “green” advocates for their environmental conservation practices (Grant, 2007, p.126). This lends weight to Muji’s credibility.

As Muji grows, it is finding harder to strike a balance between the dichotomy between advertising (to attract sales) and no-branding (stay true to their principles). For a company that claims to be “no-brand”, their marketing strategies may not reflect this. Customers are thus confused and may be turned off by Muji’s conflicting approach.

Overtime, Muji’s “no-brand” stance becomes an identifiable brand itself and some critics are scorning at Muji for conceit as to self conscious and contrived (Wylie, 2005).

Unlike in Japan, Muji seem “insecure” over its customers’ appreciation and understanding of their brand, especially in the U.S. market. It is plausible that Muji had become ambitious and thus targeting unsuitable segments abroad.

v. People

Muji continues to retain their appeal because it has an advisory board that comprises of many high profile Japanese designers who oversee the brand direction, as contrasted to being set by the Management (Haig, 2006, p.225). In this way, consistency of the brand image will be maintained without stifling the designers’ creativity.

Although Muji commissions some of the best international designers to create its product, they are adamant about not disclosing their identities so as not capitalizing on “names” (Fralic, 2007; Gogoi, 2005). Instead, Muji choose to let their well-designed products speak for themselves (Fralic, 2007; Gogoi, 2005; Peng & Chen, 2007, p.126). Muji did not want the names to interfere with their consumers’ appreciation of the egalitarian aspects of their products, nor become the exclusive product of an individual (Peng & Chen, 2007, p.126).

However, it is undeniable that Muji has employed famous designers like Enzo Mari, Sam Hecht and Fukazawa Naoto for their expertise and this reinforces the emphasis Muji places on product design (Gogoi, 2005).

Muji’s first retail outlet opened in June 1983 in Aoyama, Tokyo, one of the most fashionable areas in the city and was used as model for the subsequent 155 stores which opened the following year (Peng & Chen, 2007, p.21). Early Muji stores typically offers 200 to 300 items with an average floor space of 120 square metres (Peng & Chen, 2007, p.21).

As Muji’s product range expands, so is their retail space and domestic network of stores to reflect their commitment to become a total lifestyle concept (Peng & Chen, 2007, p.21).

As Muji objects are defined as being imperceptible, adaptable and basic, Muji needs to develop a brand-scape to render the Muji aesthetic visible (Holloway & Hones, 2007). This is done with tightly controlled display space and unified product packaging. In-store signs almost invisible and the products are displayed in plain plastic containers or unpainted wicker bins (Wylie, 2005). Through their retail spaces, Muji establish a brand image for Muji – natural environment that proposes the simple lifestyle advocated by Muji’s philosophy (Holloway & Hones, 2007).

vii. Processes

– Production Process

Muji material selection process, as well as their production processes, are scrutinised to achieve operational efficiency and minimum waste without compromising their product quality (Ryohin Keikaku, 2009). On average, Muji releases a new collection twice a year for the household and apparel lines (Ryohin Keikaku, 2009).

Through IT, Muji’s physical distribution system was established logistically to track the movement of their product through their value chain with precise accuracy (Ryohin Keikaku, 2009; Porter & Millar, 1985). This encompasses every aspect from merchandise procurement to outlet supply (to ensure manage the inventory), reduction of physical distribution cost, aggregation and transmission of product distribution information, and improvement of stores’ efficiency (Ryohin Keikaku, 2009). It lowers Muji’s cost and enhances their differentiation.

Moreover, Muji is able to make better decision making relating to customer information and automatic ordering systems with an IT based business process support system (Ryohin Keikaku, 2009).

Part 3) Recommendations

Muji is known as a source of sensibly priced basics in Japan. However, Muji’s egalitarian appeal has been largely lost in translation; design hounds in the U.S. and the U.K. are fetishes of the brand (Hsu, 2007).

Although it is a success to adapt marketing to the local countries, Muji should consider standardising its messages that may conflict with the brand’s integrity and undermine its credibility in the long term.

Price: Muji’s market penetration to U.S. had been poor. It is unable to compete on prices due to the high import cost and lack the economies of scale they enjoy in Japan. Muji should reconsider whether they can produce their product locally.

Place: Most of Muji’s retail outlets are located in swanky and high-end cities, which translate into higher overheads that interfere with their ability to offer cheaper prices. Muji can consider opening their outlets in the outskirts of the cities where rental are lower.

Processes: To reduce costs, Muji ought to consider expanding its production capabilities to the countries it is operating in to save on logistics, or operate in labour intensive countries like China.

Promotion: Although Muji is against using logos or brands to mark their product, it was inescapable that it becomes identifiable brands themselves (Gogoi, 2005). Muji’s original plans to be innocuous seem to be working against it as the brand grows bigger.

Hence, Muji need to redefine and clarify what simplicity and being “no-brand” mean to Muji, as well as its customers; as concept of simplicity is ‘complex’ as it embodies several meanings[5].

Part 4) Conclusion

This report had made a detailed assessment of Muji’s marketing strategy in accordance to the marketing mix. The key to Muji’s success had been its market orientation, depth in their brand philosophy, and brand flexibility with its simple, stripped down formula (Muji (HK), 2008; Haig, 2006, p.225).

Muji does not patronise its customers with grandiose marketing tactics and prescriptive branding; but focuses on creating the best products possible that will benefit the customers’ life (Haig, 2006, p.225).

Although Muji proclaims to be cheap with uncompromising quality in Japan, it is sold at premium prices overseas and consumers elsewhere lap in Muji products for the symbolism Muji represents.

As Muji grows into an international brand, it has to make adjustments to stay attuned to its core values and this is addressed in the Recommendations.

[3] As mentioned before, Muji’s believes in simplicity, practicality, recycling and minimising waste. It is passionate about the cause and seeks to spread the message to the masses in the form of lifestyle choices. See section b) on Muji’s Mission Implications (report p.8).

Fralic, S. (2007). Get ready for the Muji movement: No-frills brand from Japan ready to roll into North America: [Final Edition]. Times Colonist, November 3. [Online]. Available from http://www.proquest.com.libproxy.nlb.gov.sg/. Accessed 1 July 2009.

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2 thoughts on “Muji: On Strategic Marketing”

dzaf13 May 2011 / 8:04 pm

Hello Ying Wei! Remember me? Dzaf from DCMD! Was doing some research on MUJI & Stumbled upon your blog. It has been very useful to Chiew Hong & myself’s group presentation on MUJI! Thanks very much and hope you are doing well! Cheers! :D

Very nice post. I just stumbled upon your weblog and wanted to say that I have really enjoyed surfing around your blog posts.
After all I will be subscribing to your rss feed and I hope you write again
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